A WEEKLY ECONOMIC UPDATE FROM CONGRESSMAN GREGORY W. MEEKS

ECONOMIC ACTIVITY

Production

• The purchasing managers’ index (PMI) rose 2.5 points to 56.9 in October, exceeding market expectations. The October level indicates continued expansion in the manufacturing sector. All five PMI components were above 50 (indicating growth)—production (62.7), new orders (58.9), employment (57.7), raw materials inventories (53.9), and supplier deliveries (51.2). (Institute for Supply Management)

• Manufacturers’ new orders for durable goods increased 3.3% in September, exceeding shipments for the first time since June 2008. Durable goods orders include aircraft orders, which are volatile. Excluding transportation (which includes aircraft), new orders fell 0.8%; the market had expected an increase of 0.5%. (Census Bureau)

• Shipments of core capital goods (nondefense capital goods excluding aircraft) increased 0.4% in September, following a series of solid gains during six of the preceding seven months. (Census Bureau)

Employment

• In the week ending October 23, initial Unemployment Insurance claims decreased by 21,000 to 434,000. Markets expected initial claims to remain fairly constant at 455,000. (Bureau Labor Statistics)

• The four-week moving average of initial UI claims (which smoothes weekly volatility) was 453,250, down 5,500 from four weeks earlier. This is the seventh consecutive decline. (Bureau Labor Statistics)

Housing

• New single-family home sales rose 6.6% in September to 307,000 units at an annual rate. (Census Bureau)

• Existing single-family home sales increased 10.0% in September. (National Association of Realtors).

• The FHFA purchase-only house price index edged up 0.4% in August. (Federal Housing Finance Administration)

Consumer Confidence and Spending

• The Conference Board Consumer Confidence index edged up 1.6 points to 50.2 in October, remaining close to its average value over the past year. The increase in the overall Conference Board index reflects increases in both primary component indexes. The present situation index rose 0.6 point to 23.9, and the consumer expectations index (the component more closely related to household spending) rose 2.3 points to 67.8. (Conference Board)

Output

• Real GDP rose at a 2.0% annual rate in the third quarter of 2010, in line with market expectations. An increase in inventory investment contributed 1.4 percentage points to overall GDP growth. Final sales (which exclude the contribution from inventories) grew 0.6%, and consumer spending rose 2.6%. (Bureau of Economic Analysis)